Investors prefer China

Foreign investors consider Chinese economy to be the most reliable for their investments. According to the investigation published by OECD in year 2002 China is the country that has attracted the greatest volume of direct foreign investments leaving behind leaders of latest years -the USA and Great Britain. Investigation “Trends and Recent Developments in Foreign Direct Investment” published by OECD has marked a new trend in the international market of movement of the capital. According to the results of year 2002 China has occupied the first place in the world by the volume of direct foreign investments leaving significantly behind the USA. According to OECD, the volume of direct investments in China has increased 20% in year 2002 and reached $53 billions. During the same period the GDP of China has increased 8%.

Initially, the investigation embraced only 30 countries-members of OECD that are also the greatest economies of the world. However, largest industrial countries unlike China are passing through the period of slowing of economic growth which has negative influence on the volume of attracted direct foreign investments. Thus, foreign investments in the countries of OECD made $490 billions, which means a drastic $124 billions decrease in comparison with year 2001. the top of direct investments flow was in year 2000 when they made $1,27 trillion. The greatest receivers of the direct foreign investments among the countries of OECD have always traditionally been the USA and Great Britain. But following the common trends, in year 2002 the volume of direct foreign investments received by them has significantly decreased. In the USA this number has decreased 77% till $30 billions and in Great Britain 60% till $25 billions.

According to OECD the reason of such decrease in the economy of the USA and Great Britain is the economic recession in these countries, relative weakness of stock markets, geopolitical factors and a huge debt of corporative sector before the banks.

According to the experts of the Organization, if the trend of decrease that was observed during the last 5 month of this year in the M&A market is continued, this year countries-members of OECD will have a 25-30% decrease in the volume of direct foreign investments.

Among the developing countries most attractive for the investments of the apart from China are Brazil and Hong Kong. According to the results of year 2002 the volume of direct foreign investments in the economy of Brazil made $19,2 billions, in the economy of Hong Kong – $13,7 billions. Russia has a rather high index: last year it managed to attract $2.4 billions of foreign investments. Moreover, during the 5 months of 2003 it was the first time in the post-soviet epoch when the volume of received foreign investments exceeded the outflow of capital for abroad. The analysts explain these trends by positive prospective of Russian economy?s development and strengthening of Russian rubble.

Ukraine was included in the investigation of OECD as it is not a member of this organization and the volume of direct foreign investment in its economy remains low. According to different estimations, the volume of foreign investments in Ukraine made $0.8 billions in 2002, as to say the same number that managed to attract Lithuania

DFI – volume of Direct Foreign Investments in $, billions

Rating Country DFI in 2002 DFI in 2001 DFI in 2000 DFI in 1999
1 China 52,7 44,2 38,4 38,8
2 France 48,2 52,6 43,3 46,5
3 Germany 38,1 33,9 203,1 55,8
4 the USA 30,1 130,8 307,7 289,5
5 Holland 29,2 51,2 60,3 41,2
6 Great Britain 25,0 62,0 119,7 89,3
7 Canada 21,4 27,5 66,6 24,4
8 Spain 21,2 28,0 37,5 15,8
9 Brazil 19,2 22,6 32,8 28,6
10 Ireland 19,0 15,7 26,5 18,5
11 Belgium 18,3
12 Italy 14,6 14,9 13,4 6,9
13 Australia 14,0 4,0 13,0 2,9
14 Hing Kong 13,7 22,8 61,9 24,6
15 Mexico 13,6 25,3 15,5 12,9
16 Sweden 11,1 11,8 23,2 60,9
17 Switzerland 9,3 8,9 19,3 11,7
18 Japan 9,3 6,2 8,3 12,7
19 Finland 9,2 3,7 8,8 4,6
20 Czech Republic 8,4 5,6 5,0 6,3